Todd Boehly or Saudi Arabia: Who owns Chelsea? Suspicion rises

In recent weeks, speculations regarding the potential links between Chelsea Football Club, their majority owner Clearlake Capital, and Saudi Arabia’s Public Investment Fund (PIF) have gained significant attention.

Accusations suggest that Chelsea may be circumventing financial fair play (FFP) regulations by selling players at inflated prices to PIF-controlled Saudi Pro League (SPL) clubs, ultimately protecting Clearlake’s investment.

These claims have garnered support from a wide range of fans and rival teams.

The following evidence has been put forth to support these allegations:

Chelsea reported a pre-tax loss of £121 million ($154 million today) for the 2021-22 season, following a loss of £153 million the previous season.

Since being purchased last year by a group led by US billionaire Todd Boehly but primarily funded by Clearlake, Chelsea has spent £600 million on new player acquisitions.

PIF, Saudi Arabia’s sovereign wealth fund, has invested in Clearlake and collaborated with one of Boehly’s businesses to contribute funds to a hotel chain.

PIF has recently acquired majority stakes in the four largest clubs in the Saudi Pro League and has made substantial investments in other sports-related projects.

Notably, Chelsea’s N’Golo Kante has recently signed with one of the Saudi clubs, Al-Ittihad, and the club is engaged in talks regarding the potential transfer of six more high-earning players to the league: Pierre-Emerick Aubameyang, Callum Hudson-Odoi, Kalidou Koulibaly, Romelu Lukaku, Edouard Mendy, and Hakim Ziyech.

The confluence of a club in need of offloading high-earning players and potential buyers seemingly associated with the same deep-pocketed backer has raised eyebrows and suspicions.

Christina Philippou, a principal lecturer in accounting, economics, and finance at the University of Portsmouth, commented on the situation, highlighting the common issue of conflicts of interest in investment funds.

She emphasized the importance of transparency and declarations, as reflected in the recent White Paper on football governance, which necessitates football clubs to disclose their ultimate beneficial owners.

Regarding Chelsea, their ultimate owners have been officially declared. Public records on the Companies House website reveal the presence of Boehly, individual investors in the consortium, and Clearlake’s co-founders and managing directors, Behdad Eghbali and Jose Feliciano.

The apex of the corporate structure is Blues Partners Limited, a joint venture between Boehly and the Clearlake duo. Clearlake has provided approximately 60 percent of the £2.5 billion required for the club’s acquisition and subsequent player expenditures.

Therefore, there is no dispute that Clearlake has made a significant investment in Chelsea.

However, the controversy lies in determining the true source of Clearlake’s funds, leading to questions regarding PIF’s involvement. Established in 1971, PIF initially invested domestic industries using Saudi Arabia’s fossil-fuel wealth.

In 2014, it gained permission to invest in overseas firms, and in subsequent years, under the control of Mohammed bin Salman (also known as MBS), PIF has grown substantially.

MBS, currently the crown prince and the kingdom’s de facto leader, has utilized PIF as his private bank to diversify and modernize Saudi Arabia’s economy.

Sports investments, including the majority acquisition of Premier League club Newcastle United in 2021, have become a significant part of PIF’s expanding portfolio.

Clearlake Capital, based in Santa Monica, specializes in consumer, industrial, and technology sectors. Founded in 2006 by Eghbali, Feliciano, and Steven Chang (who left the business in 2015), Clearlake has become a prominent player in acquiring mid-sized American companies.

The company typically borrows two-thirds of the required funds to purchase these firms, assists their management teams in growth strategies, and eventually sells them for a profit. Clearlake boasts around $75 billion (£59 billion) in assets under management, with its valuation exceeding $4 billion in 2018.

The firm’s growth has been impressive since then, with approximately 450 different investments throughout its 17-year history.

While Chelsea has declared its ultimate owners, questions persist about the true source of Clearlake’s investment, potentially involving PIF.

These allegations raise concerns about potential financial manipulations and conflicts of interest. As the football world eagerly awaits further developments, the calls for increased transparency and scrutiny in football club ownership continue to grow.